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$14 Billion Auto bailout collapses in Senate


The future of the U.S. auto industry was in doubt Friday morning after a proposal for $14 billion in federal loans died in a late night Senate vote.

The Senate voted 52-35 to bring the measure for a vote - short of the 60 votes needed to advance the legislation. The failure followed the collapse of negotiations between Senate Democrats and Republicans seeking a compromise that both parties, as well as the companies and the United Auto Workers union, could accept.

The dramatic late-night developments could doom General Motors to a bankruptcy and closure in the coming weeks, with Chrysler LLC potentially following close behind.

While Ford Motor has more cash on hand to avoid an immediate crisis, its production could be disrupted by problems in the supplier base, as could the production of overseas automakers with U.S. plants such as Toyota Motor and Honda Motor.

Source: CNN